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Tickers: LVS, PNK, SGMS, WYNN, HT, NCLH, SNOW

EVENTS TO WATCH

Wednesday, May 21

  • East Coast Gaming Congress

Wednesday, May 21 - Thursday May 22

  • G2E Asia - The Venetian Macao

http://www.g2easia.com/Conference/#IGaming

Thursday May 23

  • Codere 1Q conf call

 Thursday May 27

  • Aristocrat F1H 2014 conf call

COMPANY NEWS

LVS (WSJ) is conducting a search for a new President and Chief Operating Officer as current COO Michael Leven's contract expires at the end of this year.

Takeaway:  Mike has done an excellent job but he is 76 so we are not surprised he is considering retirement.  This is a critical new hire. Sheldon won't be around forever either

 

PNK – withdrew its application for a proposed casino near Thruway Exit 23 near Albany NY (the Capital region) as its development partner chose a Global Gaming is the proposed operator. 

Takeaway:  Better to withdraw today and receive the $1 million application deposit refund than lose the deposit.

 

SGMS – is attempting to issue $375 million of 7-year senior subordinated notes  via private placement debt to QIBs.  UOP is to repay existing 9.25% senior subordinated notes due in 2019. 

Takeaway: We are keenly watching this placement as we expect BYD to be in the market in August with a refinancing transaction.


WYNN – appointed Stephen Cootey as the company’s CFO, SVP and Treasurer, effective immediately. Cootey has served as the company’s Treasurer since February 2014, and as the company’s SVP - Finance from January 2014 to May 2014.  Prior to WYNN, Cootey was VP Corporate Finance at Las Vegas Sands. 

Takeaway: A widely telegraphed promotion.  Mr. Cootey was previously an investment banker and debt money manager. 

HT – holder GRS Advisors discloses 6.2% stake and intends to engage management in discussions to identify opportunities to increase HT's valuation and share price.

Takeaway: A new, more management friendly form of activism? 


NCLH – announced "Norwegian NEXT" and will spend more than $250 million through 2015 to enhance dining, drinking, entertainment and other aspects of its cruise product. 

Takeaway: You have to spend to keep up with the cutthroat competition.  It is the right decision for NCL but it's still cash out the door.

Prestige Cruise Holdings(Cruise News) recent commentary indicates Prestige has approved the construction of two new ships or Oceania Cruises by Fincantieri.  The new vessels will be sister ships for the Marina and the Riviera.

Takeaway: Pipeline of new ships is growing.


SNOW – announced the resignation of Juan Perez, SVP and Corporate Controller effective May 15, 2014.

Takeaway:  Yesterday, we found it very curious to read a Form 4 filing on behalf of Mr. Perez indicating he forfeited shares and without further explanation from the company until the 8K filing.  Also seems unusual given SNOW's recent IPO and Mr. Perez joining SNOW in September 2011.

INDUSTRY NEWS

GAMING      

American Gaming Association - (WSJ) Withdrew support on online gambling

AGA CEO Geoff Freeman said disagreements among casino operators over online gambling is "an issue that the association cannot lead on" so it has withdrawn from the fight.

 Takeaway:  Another blow to hopes of federal legalization of internet gambling.  Adelson is cheering somewhere (we think from Macau).

Massachusetts – Massachusetts Gaming Commission is delaying the Boston region casino license again.  It will now hand out the license between end of August and beginning of September to give communities enough time to finalize mitigation agreements with Wynn or Mohegan Sun.  Commission still plans to issue the Western Region license (MGM Springfield - sole bidder) on June 13.

Takeaway:  Award of license to MGM remains on track although groundbreak probably won't happen until the Repeal issue is resolved.

Online Gaming in California – the Pechanga and San Manuel Native American tribes are working to bring online poker legislation to the California legislature.

Takeaway: Will be a slow moving legislative process in California

MACRO

China - (WSJ) unveiled details of its plans to let private capital take part in major infrastructure projects. The reform commission listed a total of 80 such projects, covering railways, gas pipelines, telecommunications and clean energy

Takeaway: Would appear the Chinese Central is fiscally constrained.

China - Zhu Baoliang, head of the State Information Center's economic forecasting department, said the rising cost of borrowing is weighing on China's enterprises, especially real estate developers. Zhu called for more flexibility in the PBoC's monetary policy, including cutting the reserve-requirement ratio for banks

Takeaway:  Still waiting for the RRR cut

Hedgeye remains negative on consumer spending and believes in more inflation.  Following  a great call on rising housing prices, the Hedgeye

Macro/Financials team is turning decidedly less positive. 

Takeaway:  We’ve found housing prices to be the single most significant factor in driving gaming revenues over the past 20 years in virtually all gaming markets across the US.